Inflation's effect on your buying decision

Regardless of one's opinion of the recent financial bailouts, the fact is that they are happening, and by all indications will continue to happen. We're simply printing paper! Everyone knows it. And the end result of printing all of this money will be inflation. It is the inevitable result of overprinting money. In inflationary times, cash, bonds, and stocks do poorly. Only two investments thrive: precious metals like gold, and real estate. When inflation hits the Federal Reserve will raise rates to keep it in check. This is their only method of controlling it. The worst case scenario is stagflation, where we have low growth AND high inflation. We had this in the 70's, and stocks performed poorly that decade as a result. However, anyone who bought a home in the 70's can certainly attest to the fact that their property is worth a lot more today. When this inflationary cycle will arrive is a matter of debate, yet it will arrive! Hence, we are sitting on the very best opportunity to buy a home for many years now:

• Rates are at historic lows-when inflation arrives they will be high. By 1981 rates were at 18%
• Sellers are motivated to sell
• When inflation returns, the smart money will move back into real estate. Subsequently, sellers will have more options and will be less inclined to negotiate their asking prices.

In short, RIGHT NOW you can negotiate the best price, with the lowest rates, and hedge against the coming inflation. There is no other investment with all of this going for it. And let's not forget the tax write-offs!

Could I be wrong? Sure! Yet the above mentioned scenario is not only plausible and likely. It also has a historical precedent. Our economy moves in cycles, and it would be fool-hearty to think that inflation will never come back. It is the likely result of printing excess amounts of money.

I short, the case for buying now is simply overwhelming...